The Reason Why Endologix, Inc. Is Jumping 10% Today

By Todd Campbell Markets Fool.com

Image source: Getty Images.

Continue Reading Below

What happened

A quick reinstatement of the CE Mark for the company's AFX and AFX2 endovascular AAA systems is sendingEndologix, Inc.(NASDAQ: ELGX)shares 10% higher at 3:45 p.m. EST Wednesday.

So what

It's been tough sledding for Endologix investors since Dec. 13, 2016 when the company disclosed that EU regulators had suspended the CE Mark on its devices following reports of type 3 endoleaks for its prior generation device.

Endologix voluntarily stopped shipments of its AFX systems in late December to study the problem, but it was able to begin reshipping devices within days after testing them to insure their safety. The reinstatement of the CE Mark in Europe on the systems means a review confirmed that the company has adequately responded to the problem, and that endoleaks aren't likely in the current system.

Continue Reading Below

Now what

Endologix is developing Nellix, an endovascular aneurysm sealing system for infrarenal abdominal aortic aneurysms, but that product isn't expected to become available in the U.S. for a while longer. As a result, the company is reliant on the AFX system for its revenue.

The reinstatement of the CE Mark provides investors with a bit more confidence that any drag on sales caused by the endoleaks won't be long lasting. Of course, that's not a given, so until Q4 and Q1 figures are released, investors might want to remain cautious.

10 stocks we like better than Endologix
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Endologix wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of January 4, 2017

Todd Campbell has no position in any stocks mentioned.His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.